U.S. Stocks Rebounding Amid Spiking Oil Prices, Treasury Yields

Stocks are mostly higher in morning trading on Wednesday, rebounding strongly following the steep drop seen in the previous session. The major averages have all moved back to the upside on the day.

Currently, the major averages are just off their highs of the session. The Dow is up 438.50 points or 1.3 percent at 33,733.45, the Nasdaq is up 91.90 points or 0.7 percent at 13,624.36 and the S&P 500 is up 54.14 points or 1.3 percent at 4,360.40.

The strength on Wall Street comes as the price of crude oil continues to surge, jumping to its highest levels in eleven years.

Energy stocks are benefiting from the spike in oil prices, which comes amid the ongoing war in Ukraine and OPEC’s decision to stick with plans for a modest increase in output.

A rebound by treasury yields is also contributing to significant strength among banking stocks, with the KBW Bank Index jumping by 2.9 percent after ending the previous session at a five-month closing low.

Computer hardware stocks are also seeing substantial strength on the day, driving the NYSE Arca Computer Hardware Index up by 2.9 percent.

Steel, transportation and semiconductor stocks have also moved notably higher, while gold stocks are among the few groups bucking the uptrend.

On the U.S. economic front, payroll processor ADP released a report showing U.S. private sector employment jumped by much more than expected in the month of February.

ADP said private sector employment surged by 475,000 jobs in February compared to economist estimates for an increase of 388,000 jobs.

The report also showed a substantial revision to the January data, with the revised data showing employment spiked by 509,000 jobs compared to the previously reported loss of 301,000 jobs.

Meanwhile, Federal Reserve Chair Jerome Powell told the House Financial Services Committee the Fed still believes it will be appropriate to raise interest rates later this month, citing inflation well above 2 percent and a strong labor market.

The likely increase in interest rates comes even though Powell acknowledged that the Russia-Ukraine conflict has introduced significant uncertainty for the U.S. economic outlook.

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Wednesday. Japan’s Nikkei 225 Index slumped by 1.7 percent, while Australia’s S&P/ASX 200 Index rose by 0.3 percent.

Meanwhile, the major European markets have all moved to the upside on the day. While the German DAX Index has edged up by 0.2 percent, the French CAC 40 Index and the U.K.’s FTSE 100 Index are both up by 1.2 percent.

In the bond market, treasuries are giving back ground after moving sharply higher over the two previous sessions. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 10.8 basis points at 1.815 percent.

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